That is not the only possible interpretation. The Cambridge website detailing the admission process specifies that the Board decides on 'required levels for academic and English language attainment' (although perhaps that only applies to academic conditions attached to offers) and that it has the power to decline 'a degree committee's recommendation to make an offer to any candidate who does not meet these criteria.' That sounds pretty broad, thus I would be weary of jumping into any conclusions. It does seem that the issue lacks transparency.
That sounds fair but involving a wide ambit of discretion. So I guess the degree committee scrutinizes the procedural requirements (e.g., references, and all the formalities that needs to be complied with), while the BoGS evaluates the academic rigor of the application. Being on the BoGS stage just means the degree committee finds that the formalities have been complied with and the BoGS makes the substantive evaluations.
This is what the website says about the BoGS:
"The Board is responsible for oversight of quality in graduate admissions and in this role sets the baseline for the conditions applied to offers:
required levels for academic and English language attainment:
by reference to the cost of living, the minimum level of funding a candidate will need in addition to fees
ensure that he or she is registered for use of CGSRS.
These baseline requirements are set out in the Board's admissions webpages.
The Board has power to question and decline a degree committee's recommendation to make an offer to any candidate who does not meet these criteria."
Have they enumerated their entry criteria anywhere?